Buying Property for Cash – HMO Investments
If you want a “Good” deal on your property investment or HMO Investment….there is really only one way…You must buy the property investment for cash. Do not tell the vendor you are going for a mortgage or a MIP. Motivated sellers want to move the property…not wait for you to organize your finances. Myself and JV partners only buy for cash….this way we can expedite conveyance and makes us a preferred buyer as Manchester is a competitive market “at the moment”.
Buying for cash does not necessarily mean your own money. Have the necessary funds readily available, accessible from your bank within a couple days. Transferring money takes time, whether it’s from one of your personal accounts, private sources (family, friends, acquaintances), or a bridging company. I would be wary of a bridging company as time works against you and you can run up finance costs very quickly. Even with experienced property investors like us, you can run into snags. We just had to extend a kitchen on a Professional HMO property as per the council. This professional HMO refurbish work usually would take 2 months…plus minus…Now due to the council, we are going into month 4. Not fun…but definite reality.
The greatest benefit of cash purchases is closing quickly, which is difficult if you need to source and transfer money after finding the deal. We prefer only selling to cash buyers for our Professional HMOsand Social HMOs. Banks are getting tighter and come Sept they will be more restrictive. This gives cash buyers a definite advantage.
You should also know at this time how you want to structure the deal, as that will affect financing. Will the title be in your name? Always make sure you have money for overages. There are always added costs in a refurbishment project…especially professional HMOs as we do in Manchester.
Besides simply buying for cash…have all your boxes ticked…
Surveyor
Solicitor
Accountant
Builders ready to start work….
Do not just look at the yields of property investments or professional HMOs….look at voids…no pays…maintenance…management….etc. There are alot of moving parts….In conjunction with the professional HMOs we do social hmos as this mitigates many of the moving parts.
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